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- [00:01]
A
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B
Hey, what's news listeners? It's Sunday, October 12th. I'm Kate Bullivant for the Wall Street Journal. This is what's News Sunday, the show where we tackle the big questions about the biggest stories in the news by reaching out to our colleagues across the newsroom to help explain what's happening in our world this week. Hollywood is in crisis mode. With the historic, historic center of film and TV production looking more like a disaster movie than a glamorous rom com, many media houses are finding other cheaper places to make their shows like Disney's Marvel Studios which makes many of its superhero movies in the uk, and Netflix which has expanded a production facility in New Mexico. Meanwhile, lurking in the shadows is the increasing presence of artificial intelligence. Earlier this year, organisers of the Oscars announced that films made with the help of AI will be able to win top awards. And you might have heard of the so called AI actor Tilly Norwood, who's drawing criticism from some A list celebrities like Emma Stone. So how are Hollywood and the people who work there keeping up with these changes? And what does the rise in AI mean for content creation more broadly foreign? To help dig into this, I'm joined by Journal Entertainment reporters Ben Fritz and Joe Flint. Ben, I want to start by focusing on Hollywood. Why are we seeing this downward spiral when it comes to TV and film production?
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C
The very short answer is that the streaming bubble has popped. There was in the late 2010s and early 2020s this huge rush to establish and grow streaming services like HBO Max and Disney plus and Apple tv, TV and Netflix. And then investors a couple of years ago started to reshift and say we don't care about growth, we care about profits. And of course the easiest way to shift from growth to profits is to cut costs and make less stuff. So the studio significantly cut back on the amount of especially TV shows for streaming that they were making. And then combined with that, the stuff that they are making, especially when it comes to big budget movies they're increasingly making overseas where they can get bigger tax credits and cheaper Labour. So you see a lot of movies being made in Canada, in the uk, even in Eastern Europe.
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B
And what does all of this mean for LA's economy and in particular for workers who aren't the kind of star studded a list celebrities.
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C
There are hundreds of thousands of people who work behind the scenes in very middle class jobs. They are the camera operators, the makeup artists, the assistant directors, the animators. And they are in many ways the heart of Los Angeles middle class. And for most of the last several decades they've worked pretty consistently. Now they're not. There is simply not enough work for them in Los Angeles. They're really struggling and obviously that's financially and emotionally painful for them. And of course it ripples throughout LA's economy because these people are spending less money.
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B
President Trump has proposed 100% tariffs on films made outside of the U.S. what does this tell us about the state of the industry?
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C
Well, it tells us that the dire state of movie and TV production in the United States, especially in California, is getting the attention of the President. It's a significant economic issue. However, if you talk to anybody who understands the economics of entertainment, they'll tell you a tariff is not the solution. You can't tariff a movie because it's not a physical good that comes in through a port. What people who work in movies and TV really want is a federal tax credit, something like 15% where the government would essentially refund producers the costs of making stuff here. That's what the UK does, that's what Canada does, that's what several states like Georgia, New York, California do. But if you talk to the advocates, we really need a federal tax credit on top of the ones in some states in order to make the US competitive again.
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B
We mentioned earlier about how artificial intelligence is beginning to crop up in Hollywood. There's this so called AI actor, Tilly Norwood, created by a Dutch actor and comedian. Here's a short clip of Tilly. I'm built on everything that came before me. Tilly's creator says the synthetic performer isn't meant to replace a human being, but is instead a creative work. Jo, can you tell us what impact the increase of AI is having in the District?
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D
There's a lot of concerns about AI. It doesn't just extend to artificial intelligence actresses, if you will, but it's also the creative in terms of generating scripts and materials for movies and the fear that a studio exec will just say to AI, give me a good bank heist movie. And then two seconds later there's a script based on thousands of other bank heist scripts that have been scraped into AI. There's a lot of good that AI can do in the industry, obviously just physical locations and determining best practices and how to save some money. But where the creative community gets upset, both writers, producers and actors, is the idea of being replaced by AI.
- [05:48]
B
So a mix of concerns and opportunities. Ben, are we seeing any rules when it comes to the use of AI in the industry?
- [05:57]
C
The actors and writers unions went on strike in 2023 in one of their major demands was protections against the use of AI in place of them, essentially. And basic protections they have is that if the studios want to use AI to write or to act, they have to go to the guild and work out specific terms for how to do it. Because right now there's no specific agreement and they haven't done that yet. Which tells you the major studios are not yet trying to replace writers or actors with AI. People who work in areas like animation and visual effects are very afraid. They don't have unions that have protections for them in those areas yet. And those are definitely the kind of work that AI is already starting to do. Create an animated character, create an animated background for a scene, that kind of thing. And there's a lot of artists who make a living doing that.
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B
Ben, with the challenges you outlined earlier that Hollywood's facing, which is having a broader impact on LA's economy, that added with the rise of artificial intelligence, does this mean that Hollywood as we know it is coming to an end? And if so, what does the future of Hollywood?
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C
I mean, I highly doubt Hollywood's coming to an end. If you talk to optimists, they'll point out that every disruptive technology in the past, people have feared it's going to be the end of Hollywood. And things have worked out for the best. Whether it's sound in movies, whether it's television, VCRs, DVDs, Internet streaming, it's always turned out to be a boon for Hollywood in the end, but that doesn't mean it's guaranteed. Now, one thing optimists say is that, yes, AI could eliminate jobs, but it also will bring down the cost, which means independent filmmakers can make a really good movie on a much lower budget. So you might see fewer people working on each movie and TV show, but a lot more stuff getting made because it's cheaper to make each thing.
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B
Coming up, we look at how the incoming tide of content generated by artificial intelligence is being felt across the creative industry as a whole. That's after the break.
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B
So the jury is still out on how Hollywood will withstand the AI content boom. But Joe, how is this being felt across other creative industries?
- [08:30]
D
Outside of film, the music labels are also very concerned about AI. I certainly enjoy those fake funk covers of ACDC songs now popping up in my feed. But I can't imagine that ACDC or their label is too happy about it if they're not getting any compensation. So it's not just Hollywood, it's the entertainment industry at large. It's music, it's tv. And all these things are new technologies. And the general reaction to new technologies, of course, is what does it mean for our bottom line? And resist change no matter what, and eventually these things become incorporated. YouTube now in many ways is a fertile ground for content makers who maybe can't get a deal with Netflix. They don't have a big Hollywood agent to make their show, but they can go on YouTube and if they do something that's done well, well then it can end up on one of those other places. So this can also be a door technology as well.
- [09:36]
B
And from your reporting, what strategies are different creative industries taking when it comes to using AI? Do you get the sense that people on the whole are embracing it or turning against it?
- [09:50]
D
It's being used for a lot of quick ways to get through stuff. Summarizing scripts. It used to be in Hollywood, one of the positions you might first start out with after you were done with the mail room was being a script reader and making notes and writing descriptions of scripts. And now you download that script into a AI and get a pretty good summary of it.
- [10:10]
C
Just going to point out there's a lot at the big professional companies when it comes to content production. They're still moving very slowly figuring out whether and how to integrate AI into their workflows. You talk to the big animation companies, the big brands, you've heard of Dreamworks, Pixar, et cetera, they're moving pretty slowly. But if you look on YouTube, there are semi professional animators who are making lots of stuff with AI right now, for example.
- [10:33]
B
So finally, can you put this all into perspective for us? The impact of AI, what are the kind of real effects going to be? Are we going to feel those now or is it going to be really More of a long term thing.
- [10:46]
C
It's definitely a longer term thing because Hollywood is very slow to adapt to new technologies and figuring out how to really integrate this stuff into their production processes and deal with the unions is going to be very challenging. But you are definitely going to slowly but steadily see a lot of junior entry level jobs, assistant type work being overtaken by AI. And because there's so much content being produced outside Hollywood now on YouTube, you're going to see a lot of experimentation with AI there and you'll certainly start to see some stuff really click and some stuff succeed and that will impact how everybody produces stuff. The pessimistic future is all the creative people who are trying to earn a living can't make money at it anymore. And the optimistic future is it makes it easier for anybody who has a creative vision to actually bring that to life and we can see a creative renaissance.
- [11:37]
D
I just think there's a lot of concern in the industry at large and there's going to be a lot of tension in the years ahead between the entertainment industry and the tech industry and between creative executives and all of these technologies and what it's going to mean for entertainment and how people view entertainment. Ultimately, the consumer decides. If the consumer doesn't have a problem with Tilly Norwood, well then bad news for everyone else. But if the consumer like, no, I need real people and real stars and real scripts, well then there would be nothing to worry about.
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B
Ben, Joe, thanks so much for your time.
- [12:16]
D
Thank you.
- [12:17]
C
My pleasure.
- [12:19]
B
And that's it for what's new Sunday for October 12th. Today's show was produced by Zoe Culkin with deputy editor Chris Sinsley. I'm Kate Bullivant and we'll be back tomorrow morning with a brand new show. Until then, thanks for listening.
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